Innovation Inside Study

To understand the detailed conditions surrounding innovation, INSITUM conducted a qualitative and quantitative study. This study sheds light on the current state of innovation in organizations from the contexts, barriers, needs and outcomes seen as necessary to make innovation happen.

Innovation has become an indispensable necessity for companies in it for the long term. The importance of innovation has been discussed for years and many companies have made great strides in this direction. But for the most part, innovation efforts exist in isolation and have been mostly informal. They often lack strategy, expertise, financial support, sufficient time and the support from senior management required to yield concrete results. Part of the problem lies in the absence of information that exists about the topic — from the ambiguous definition of the word “innovation” (which is used just as often to describe a technological initiative as a brainstorming session) to the lack of emphasis on innovating that exists in many organizations (where there is often no person or group responsible for innovation).This year, INSITUM was recognized by Fast Company as one of the most innovative businesses, due in large part to our status as industry leaders who help the world’s largest companies perform user-centered innovation. We believe that it is our responsibility to spread the knowledge that our survey participants have generously shared — many of them top leaders in innovation, as well.Our primary intention is to inspire a greater number of leaders to foster innovation in a more efficient, effective and relevant manner.

What is this study about?

1 - How is innovation implemented? What models, processes and strategies do organizations use to implement it?

2 - What kinds of projects, resources and investments do organizations consider to be most beneficial for innovation?

3 - What are the catalysts and barriers for innovation within organizations?

4 - What level of expertise and skill is required for organizations and their people to implement innovation initiatives

5 - What practices work well and what must be done for organizations to reap all of the benefits of innovation?

Our primary intention is to inspire a greater number of leaders to foster innovation in a more efficient, effective and relevant manner.

Organizations are innovating, but much work needs to be done for them to fully reap the rewards.

Who participated in this project?

This year, we had higher participation than last year. Our partnerships with business schools in various countries helped us obtain a greater and more diverse reach, both geographically and in terms of participant profiles. We are thankful for the interest, participation and knowledge contributed by the following business schools:

As expected, there was significant participation from consumer goods companies (food, beverages, hygienic products, etc.), finances (banking, insurance and investment services) and industrial products/business-to-business/raw materials, which are representative of the largest sectors across the participant countries.

For the purposes of this analysis, we focused on including only companies with annual revenues of more than $50 million, dividing the companies into four categories:

• $50 to $100 million

• $100 to $500 million

• $500 to $1 billion

• Over $1 billion

In total, we received responses from more than 260 companies, covering 310 participants in an online survey and 23 qualitative interviews.

Some of the highlights of what we found include:

EXPERTISE IS BEING DEVELOPED, BUT IT IS STILL IN ITS EARLY PHASES AND MUCH REMAINS TO BE DONE.In relation to the previous year, we have noted a significant increase in the level of knowledge about the function of innovation, but this is only visible in more mature organizations. There are still many novice organizations with little experience that are reticent to innovate. For these organizations, there is still a great deal of ground to cover.

PROCESSES REMAIN TOO FORMAL TO BE CONDUCIVE TO INNOVATION.We have noticed a significant increase in the number of organizations that have utilized more formal and rigorous processes that allow initiatives to be carried out in an orderly fashion, while still preserving the flexibility that innovation requires. More companies are realizing that creativity and ideas alone are not sufficient; they must also be put into practice in a systematic way.

INNOVATION IS GRADUALLY ENTERING OTHER ORGANIZATIONAL FUNCTIONS, BUT THE IMPACT IS MINIMAL.Innovation often begins with the product under the leadership of the marketing area. However, we are more frequently seeing innovation initiatives based in other functions of organizations, with more people working to innovate — but when everyone is in charge, no one is truly in charge.

INNOVATION MATURITY DEPENDS NOT ON REGIONAL FACTORS, BUT RATHER ON THE LEVEL OF COMMITMENT TO INNOVATE.One of the questions we are asked most frequently is, “Which countries have the most innovative companies?” In general, we do not find differences based on the nationality of the business (and the majority of the businesses act multinationally). Instead, the level of innovation is dependent on sector, size and, above all, the level of the leadership’s commitment to innovation. There is no correlation between a country and the number of innovation companies based in that country.

IT IS ESSENTIAL TO BETTER ALIGN THE INNOVATION STRATEGY WITH THE VISION AND SKILLS OF THE COMPANY.Few organizations have a well-defined innovation strategy, although this is one of the most important requirements for effective innovation. Why do we want to innovate? What kind of innovation makes the most sense for us? What do we want to achieve with this initiative? Without answers to these questions, innovation efforts will continue to be isolated and out of touch with corporate strategy.

This is the second year we have explored the state of innovation in organizations through a comprehensive qualitative and quantitative study. We are convinced that by co-creating this type of research initiative among large corporations, academia, governmental institutions and entrepreneurs, we can make the Americas among the most innovative and competitive regions in the world. This report provides some directional insights that we hope will be interesting and useful for your organization.